Advice & Feedback from Angel Investors

Key Advice and Critical Feedback from Angel Investors:

“…Are you a serious entrepreneur? 
Really?   OK… so tell me EVERYTHING about your business in 140 characters or less…”
(How many words are 140 characters?! – Guess what? An Angel Investor will expect you to know!)

About Sales:

 “…Do you have an idea of where you want to take your business? I hope you don’t because your vision is probably different than your customers.

You have to get out of the mindset of “I want” because it doesn’t really matter what you want. All that matters is what your customers want.

Start surveying your customers to figure out what they want and more importantly understand why they want it. This will help you create a product where customers would be very disappointed if your product or service didn’t exist. Having this will help you make more money.”   (Neil Patel, co-founder Crazy Egg andKISSmetrics.)


About Preparation and Presentation:

 “… With Presentations: Just remember these five things and you’ll knock ’em dead every time: 1) Know your audience; 2) have a compelling story; 3) tell that story succinctly (Sound Bites and Bite-sized chuncks) 4) Tell it with the confidence that comes from practice  (Practise, Practise, Practise!) and 5) don’t rely on bells and whistles (Technology: it will fail!) Because in the end, you are the presentation, not what’s on the screen behind you.”  (Tom Gratsby – Angel Investment Network)

“...Some general, presentation-at-large, dos and dont’s.

  • Do challenge yourself to deliver an easy-to-understand story:
      • Could I, your listener, replay to another person the very basics of your venture and how your
        target customers will benefit from using your product?
  • Do infuse passion throughout your delivery. Engage me with your story
  • Do focus on the benefits to customers of acquiring/using your product.
  • Does it simplify? Make-money? Save money? Open new markets?
  • Do differentiate your business in some way from the competition market channel, service, technical features, etc.
  • Don’t give me unclear, irrelevant, or unnecessary information.
    • It is extremely important to your success that you winnow the full amount of information into
      the particular subset that is required for this presentation.
    • If you are concerned about leaving out necessary information prepare a more detailed slide for the
      Q&A period in case it comes up.
  • Don’t try to impress me with a lot of jargon.”     (Edward P. Harley – Keiretsu Forum)

About Valuation:

“…. if you can get a couple products developed and some key clients on board, I would absolutely do that before funding. You have to keep valuations in mind. Without clients or revenue, your valuation will be depressed and that funding will cost you more in terms of equity value. If you can get $$$ coming in, you will be able to place a higher valuation and ultimately raise more, or keep more, depending on your preference for the company.”  (Brian Krause – Linked In)

“… There is no rational way to arrive at valuation, so don’t be overly concerned about getting it right.”

“… The turmoil we’ve seen over the past month means it is going to be harder for the follow on rounds to happen. And the exits are going to come later. So that puts downward pressure on pre-money valuations.”  (John Isaacson, Pasadena California. Bloomberg Week)

About Scalability:

“… The most important thing is that the company and idea are a highly scalable, high-potential business. We are talking about having a shot at generating over $50 million in sales in five to seven years. And technology businesses tend to be the ones that can grow really fast and become very large.” (Scott Shane – Columbus Ohio. Bloomberg Business Week)

“…. We invest primarily in technology-related deals, so new media and Web 2.0.
We look for things that are very scalable. We will look at business services, some health-care products, or services that usually have a tech component, and some financial services.”
  (David S. Rose, New York. Bloomberg Business Week)

About NDA’s (Non-Disclosure Agreements):

 “… It’s a small community — if you screw one entrepreneur, you’ll be out of the angel business because entrepreneurs talk.”

“…. The lifeblood of angel investors is deal flow — you need huge deal flow to find enough stuff that is worth investing in”

“… don’t ask us to sign an NDA, we aren’t going to.  We have too much to risk by screwing over an entrepreneur, but we aren’t going to fence ourselves in from investing in one of your competitors if you fail to impress us.”  – All Angel Investors, Worldwide.

About Risk:

“…. Don’t worry if the idea seems crazy — if it didn’t seem crazy, it would be too late to invest as an angel.”

“…. Only invest in stuff you actually know something about — otherwise you’re just buying a lottery ticket.”

“…. Ideally, we like to invest in big ideas that can be protected via intellectual property and the entrepreneur has the leadership skills to attract and build a first-rate team. We always prefer folks who have had prior experience in launching companies. But we’ll look at any great idea.” (John Huston – Columbus Ohio.  Bloomberg Business Week)

“…. As for the change in the economy, maybe you pick the least risky deals which means the most experienced management teams and the companies closest to having customers and generating revenue. And companies that have the shortest sales cycles are probably more attractive than those with long cycles”(Jamie Roads – Austin Texas. Bloomberg Business Week).


About Management:

“… Right now I’d go with an experienced manager rather than a brilliant new manager.”    (John May — VA, USA – Bloomberg Business Week)

About USP (Unique Selling Propositions):

“…. We like to see proprietary intellectual property. That tends to drive us to IT, biotech, or Web services companies. We will look at a consumer deal but they need some sort of IP that provides an additional barrier to competition, things like patents, copyrights, trademarks.”


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